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Question 19.6: Tucker Company reports the following data: Sales $750,000 Va...

Tucker Company reports the following data:

Sales                                         $750,000

Variable costs                           \underline{500,000}

Contribution margin            $250,000

Fixed costs                                 \underline{187,500}

Income from operations       \underline{\underline{\$ 62,500}}

Determine Tucker Company’s operating leverage.

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Operating Leverage = \frac{Contribution  Margin}{Income  from  Operations} = \frac{ \$250,000}{\$62,500}  = 4.0 

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